Horse meat and the economics of disgust

The big story out of the British Isles last week was that consumers in Ireland and the U.K. have been unwittingly eating horse meat in several products — including burgers and packaged lasagna — labeled as beef. As The New York Times notes, “Few things divide British eating habits from those of continental Europe as much as a distaste for consuming horse meat.”

Horse meat is an interesting cultural case. While considered disgusting in Britain and the United States (“So hungry I could eat a horse” is an expression here for a reason), over 200,000 horses are slaughtered for their meat every year in the European Union, according to the Humane Society International. It’s also a staple in some Central Asian countries — Kazakh Olympians brought along their own supply of horse sausages to the London Olympics. It seems to be something of an Anglo taboo, though an often hypocritical one. Australians, Canadians and New Zealanders don’t generally eat horses, but they do slaughter them for export.

Economist Alvin Roth, winner of the 2012 Nobel Prize, uses horse meat as a central example in his famous paper, “Repugnance as a Constraint on Markets.” The idea of the paper is that cultural biases against certain transactions serve as market constraints that economists would do well to take seriously rather than dismissing as irrational.

He discusses well-known examples such as organ-exchange markets and beliefs about the charging of interest in the Islamic world, as well as more outré practices such as dwarf-tossing.

Here’s what he has to say about horse meat:

“Why can’t you eat horse or dog meat in a restaurant in California, a state with a population that hails from all over the world, including some places where such meals are appreciated? The answer is that many Californians not only don’t wish to eat horses or dogs themselves, but find it repugnant that anyone else should do so, and they enacted this repugnance into California law by referendum in 1998. Section 598 of the California Penal Code states in part: ‘Horsemeat may not be offered for sale for human consumption. No restaurant, cafe, or other public eating place may offer horsemeat for human consumption.’ The measure passed by a margin of 60 to 40 percent with over 4.6 million people voting for it.”

Notice that this law does not seek to protect the safety of consumers by governing the slaughter, sale, preparation and labeling of animals used for food. It is different from laws prohibiting the inhumane treatment of animals, like rules on how farm animals can be raised or slaughtered, or laws prohibiting cockfights, or the recently established (and still contested) ban on selling foie gras in Chicago restaurants (Ruethling, 2006). It is not illegal in California to kill horses; the California law only outlaws such killing “if that person knows or should have known that any part of that horse will be used for human consumption.” The prohibited use is “human consumption,” so it apparently remains legal in California to buy and sell pet food that contains horse meat (although the use of horse meat in pet food has declined in the face of the demand in Europe for U.S. horse meat for human consumption).

He would argue that laws against horse meat are irrational in a society where eating cows, pigs and other similar animals is considered perfectly acceptable. After all, the British consumers who are outraged about having been fed Polish horse meat were perfectly willing to buy lasagna made from cows that were likely raised and slaughtered in brutal factory farms and felt few moral qualms about it.

But Roth also suggests that the fact that they are irrational doesn’t mean such attitudes aren’t real factors that should be taken into account by economists designing markets. In other words, if you want to stay in the packaged-lasagna business, don’t sell horse meat to the Brits. And certainly don’t pretend it’s something else.